Commentary on Political Economy

Tuesday, 13 December 2011

Foundations of the Economics

Western thought, from metaphysics to science, must end, must "close", must "com-plete", "satis-fy", "ful-fil", "ex-haust" itself with the conceptualisation of the "Ab-solute". The Ab-solute is what is not "conditioned" by anything else, what is causa sui (its own cause), both in the sphere of logico-mathematics and science (Leibniz's intuitus originarius that does not admit of "predicates" and therefore is entirely "self-evident") and in the sphere of human praxis (Kant's "autonomous" Practical Reason guided by the Will, which is the union of the posse [I can] with the nosse [I know] in the velle [I will]). The Will is the ultimate ex-pression of "freedom" - it is "the freedom of freedom", the power of the freedom of the Subject that knows itself). Of course, whatever is "self-evident" does not allow of ex-planation in that the definiens is in the definiendum and vice versa. The Ab-solute is therefore "ab-solved" from the "need" to explain itself - just as princeps legibus solutus (the prince is "ab-solved" from the laws because he is "above" the laws). Contra Donoso Cortez, then, we say that not just "the Dictator" operates a "miracle", in that dictatorship is "the suspension of all laws and rights, human and natural), but all constituted political power does. So we must peer into this "power" (potestas), because we do not believe in miracles - miracles have no vis, no potentia for us, us the "constituent power".

The error that the Economics commits (we call it "the Economics" rather than "economics" to emphasize that the essence of "economics" is to act as a strategy of political power) is to presume that its "subject-matter" (its sub-iectum), its "quidditas" is actually a Sub-stance, a homogeneous qualitas occulta - and it presumes as much because it starts from the phenomenology of capitalist social relations of production which are "co-ordinated and measured" by money. Every economist from Smith to Marx to Jevons started from the fact that every "thing" that is exchanged in the market has a "price" and that therefore all "things" on the market must have a homogeneous "Value" - and that this "Value" must be the "subject-matter" of a "science of Economics"!

Weber’s central failure was not that he mistook
“scientificity” for “science”, for its corresponding “practical conduct” –
which mostly he did not! Weber’s failure was rather that his insistence on
“categorizing” his “scientific pursuit” with the introduction of the “ideal
types” distracted him from the fundamental question of how the Rationalisierung is possible! This failure led him to reify, to hypostatize the
historical object of his studies into
the “scientific categories or forms” or "the ideal types" that he presumed to adopt for that study –
ignoring thereby Nietzsche’s famous warning against “systematizers”!
Essentially, Weber mis-interpreted
(!) Nietzsche’s Umwertung
(trans-valuation of all values) to
mean that “all values are interpretations
of reality”, and that therefore it is possible for the “scientific observer” of
a given historical reality to select a hermeneutic code of interpretation (the ideal types) linking rationally the means available to its
“actors” with the “pro-jected ends” that they may envisage. Yet, as Nietzsche
would have promptly reminded Weber, this framework of analysis (Entwurf), this
“phenomenalism and relativism” starts from the pre-supposition that such a “rational code” of interpretation is
both possible and applicable – which Nietzsche would vehemently deny on the
ground that it is the very possibility
and applicability of this “rational
code” itself to a given historical
reality – its effectuality - that needs to be interpreted and explained as
the mathesis universalis (Leibniz),
as the rationalization of the world
that is based on human needs, on the
“system of needs and wants”! In Nietzsche’s own words,

“It
is our needs that interpret the world;
our instincts and their impulses for and against,” (Aphorism 481, Wille zur Macht).

Weber’s Neo-Kantian hypostatization not only of
his sociology but above all of “the scientific fields of knowledge” to which he
sought to apply it – from economics, to law, to music – is induced fatefully from
this inability to com-prehend
Nietzsche’s Umwertung, his
thoroughgoing De-struktion (Heidegger)
of Western metaphysics and science and the related critique of Western Kultur and Zivilisation. It should come as no surprise, then, that it remains
suspended, as we noted earlier, between the Dezisionismus
of “charisma” derived from the individualist relativism and the Neo-Kantian formalism of the “ideal types”
necessitated by Weber’s need to ground
this hermeneutic relativism on logico-mathematical
– hence, “rational and systematic”, “scientific” - bases. What Weber fails to
com-prehend above all else is precisely the historical
character of “the metaphysical foundations of logico-mathematical rationality”
whose politicalorigins Nietzsche had made all but evident.

A brilliant
illustration of these points is provided by Norberto Bobbio who, in reviewing
Kelsen’s attack on Weber’s theory of the State and sociology of law in ‘Max
Weber e Hans Kelsen’ (in Sociologia del Diritto), concedes that Weber’s Neo-Kantian or Simmelian
‘formalism’ enticed him to his detriment into the Kelsenian ‘Norms’, but that at
the same time Weber’s “positivism” was premised on the fact that capitalism
represents a historically specific intensification of this ‘positivization’
of the juridical norm, in line with its exasperation of the Rationalisierung
– which would be theoretically a far more consistent and Nietzschean position
for Weber to take. Commenting on Kelsen’s requirement that ‘co-action’
be added to the definition of ‘legal norm’ (the famous Grundnorm)so
as to equiparate the concepts of ‘Right’ with ‘Law’ and therefore also
with that of ‘State’, Bobbio goes on to reason that Weber’s notion of
‘apparatus’ (bureaucracy) must be added to Kelsen’s ‘co-action’ for this
equiparation of Right, Law and State to have any historical effectuality!
Bobbio then comes uncannily close to the central thesis of
this study on the meaning of Rationalisierung,which we have enucleated in our Nietzschebuch and will illustrate more incisively in Parts Two and Three (of our study on Weber). In a nutshell, Bobbio perceives without actually comprehending that the notion of Right or Law or the State requires the existence of appropriate "institutions" that "en-force" these abstract concepts. The question that needs to be answered is how political enforcement can "crystallize" or "congeal" abstract concepts and how abstract concepts "dis-solve" themselves into political institutions. This is what Nietzsche attempted and others including Marx did not.

Separately, by discussing Kelsen’s
claim that his jurisprudence is intended
to applyboth to capitalist and to socialist States, Bobbio helps us
highlight the link that we are about to trace in the following sections, dealing
with the claim on the part of Neoclassical Theory to apply equally to both
capitalist and socialist ‘economies’, between Neo-Kantism and Neoclassical
Economics!

It
cannot be doubted seriously that Marx was aware of the impossibility of
reducing objectively, physically, heterogeneous labor to a homogeneous
substance. Indeed, Marx counted this, the discovery of the Doppelcharakter of the “commodity” labor power (its being at once
living labor that “valorizes” capital and “labor power” that is exchanged on
the market), as perhaps his greatest achievement. It is just as certain, as
Colletti has noted, that for Marx value was a “social hieroglyph” that, like
God or the soul, has no material existence and yet is “objective” in that it
conditions and guides human action. But, and here is the crux, this theory of
value is inconsistent with the notion of market competition. One of two things:
- either “market competition” is
regarded by Marx as an autonomous and spontaneous sphere of activity not enforced politically by one class
against another, in which case it is an aporetic
concept because “competition” invariably ends up “destroying competition” (!); or else “market competition” is a sphere
of activity that is “politically
enforced”, in which case, eo ipso,
there can be no competition as a
reality a se stante (that can stand
on its own). Yet Marx worked precisely on the grim assumption of the Law of
Value, that capitalist society reproduces itself through the operation of the
self-regulating market, especially its “pessimistic” feature – competition (the
dira necessitas). Consequently, he
had to persevere with his inconsistent theoretical frameworkbecause to have done otherwise, to have
accepted that value is an entirely
political categoryand that the
capitalist economy is operated by concrete and identifiable social institutions would have meant for him to be lowered once
again into “the kingdom of shadows”, into the shadowy world of the Political
which he despised and spurnedbecause he
identified it mistakenly with the public sphere of liberalism founded on the
“optimistic” features of the market (commutative and distributive justice).

(Of course, Marx falls into this “scientistic
trap” in Das Kapital, but generally
not in the Grundrisse which are
therefore much to be preferred as the exposition of Marx’s overall theory of
capitalism. Incredibly, in “Natural Law and Revolution”, now in Theory and Practice, Habermas argues
that it was Marx’s finding of “the theft of labor time” in the “pure exchange”
categories of bourgeois law that “discredit[ed] so enduringly for Marxism both
the idea of legality and the intention of Natural Law as such that ever since
the link between Natural Law and revolution has been dissolved”! Habermas, who
is almost entirely innocent of
economic theoretical training, cannot see that indeed it is that “side” of
Marx’s theory and of Socialism that believes in the fable of “the theft of
labor time” that then must necessarily believe,
vi rerum [by force of things!], in
the “legitimacy” of legal categories that draw Habermas’s analysis back into the orbit of Arendt’s “liberalist
and jusnaturalist” rendition of the historical reality of “revolutions”!
Habermas manages therewith to undo the valid critique of Arendt’s On Revolution that he had expounded in
his essay Die Geschichte von den zwei
Revolutionen. See also Part Three discussion of these themes.)

We should note further
how the German Historical School and other early opponents of Neoclassical
Theory objected to it on the ground that “utility” is a “homogeneous” entity
whereas in fact the “motivations” behind “economic action” are quite evidently
“heterogeneous” (see Schumpeter’s account of this in the last chapter of his Economic Doctrines).One of the constant
objections to capitalist enterprise is precisely this – that it “reduces” all
aspects of human social interaction to the “homogeneous” pursuit of “profit”.
Clearly, what these ‘critics’ fail to do is to confront the central question
that we are addressing here – that is, how such a reduction of the
heterogeneity of human activity to “homogeneous” and “rationally calculable
enterprise” or “profit” is at all possible! Here again Weber makes the colossal
Neo-Kantian mistake of assuming that there is a specific “form” of human
“knowledge” or “action” that is singularly “economic” – just as he conceded to
Kelsen that there is a specific dimension of human social activity that is
“legal”! Weber simply mistakes what are mere and highly contingent
“institutions” of human groupings – the “economy” and “value”, the “law”, “the
State” and “power” – for hypostatic and ineluctable “forms” of human knowledge
that a social scientist or “observer” can analyse in their epistemological
specificity and “autonomy” from other “disciplines”! The fact that a great mind
such as Weber’s never even posed itself the question as to how and why
“utility” could be adduced as the “ectoplasm”, the “metaphysical quidditas”
that could constitute the “subject-matter”
of the Economics bears witness to the ability of the social production of
“exchange value” and its politically-enforced transmutation into money, then
money capital, and then profit, to mystify human social relations – as Marx
took pains to emphasise.